Can U.S. Aid Win the War in Pakistan?

DADAR, Pakistan, May 28, 2009 — -- If you ask the man with the white beard behind the small store counter here, the one selling bowls of homemade ice cream to children eagerly waving their rupees in the midday sun, all the United States needs to do to reverse rampant anti-Americanism in Pakistan is provide a little milk.

It goes without saying that the $5,000 grant Badr-ul Islam received from the United States to buy refrigerators for his fledging dairy business is an infinitesimally small portion of the $11 billion in military and humanitarian aid the United States has given this country since 9/11.

And yet many U.S. officials admit their money, much of which has disappeared or been spent on the Pakistani military, has created little goodwill among average Pakistanis. Indeed, Pakistanis who describe themselves as pro-American do so only privately these days, and say they are shocked by the level of venom spewed toward the United States in private and in the media.

So the U.S. Agency for International Development (USAID) escorted an ABC News team into this beautiful mountain town to show off the other side of U.S. investment in Pakistan: about $200 million for the area hit by the devastating 2005 Kashmir earthquake, which killed 70,000 people. In total, USAID, which oversees most non-military foreign aid, has invested $3.4 billion to help develop Pakistan.

Here, among the lush hills and the bumpy roads and the buildings still lying in rubble, the United States hopes rebuilding schools, creating agriculture projects, assisting medical centers -- even giving grants for refrigerators -- can do more to win over locals than any amount of military aid can do. It hopes that its investments here help fill a vacuum of poor education and governance that militants in Pakistan often exploit.

It is a hope that the U.S. embassy in Islamabad also tried to deliver today, when it announced it would spend an additional $26.6 million to help those displaced by the ongoing war in the Northwest Frontier Province.

Pakistan launched that war against the Taliban more than a month ago in part because of U.S. pressure to crack down on fighters roaming freely a few hours from the capital. Pakistan's government has called it a war for the country's "existence," but the war has also created the country's largest humanitarian crisis in Pakistan in more than 60 years.